Screening on Loan Terms: Evidence from Maturity Choice in Consumer Credit

• 成果类型: Article
• 署名作者: Hertzberg, Andrew; Liberman, Andres; Paravisini, Daniel
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Philadelphia; New York University; University of London; London School Economics & Political Science
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy024
• 发表日期: 2018
• 页码: 3532
• 关键词: debt maturity; information asymmetries; imperfect information; Financial structure; MARKETS; determinants; insurance; default; MODEL; RISK

摘要

We exploit a natural experiment in the largest online consumer lending platform to provide the first evidence that loan terms, in particular maturity choice, can be used to screen borrowers based on their private information. We compare two groups of observationally equivalent borrowers who took identical unsecured 36-month loans; for only one of the groups, a 60-month loan was also available. When a long-maturity option is available, fewer borrowers take the short-term loan, and those who do default less. Additional findings suggest borrowers self-select on private information about their future ability to repay.